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hi_caramba_2008 writes "We are a bunch of good friends at a large software company. The product we work on is under-budgeted and over-hyped by the sales drones. The code quality sucks, and management keeps pulling in different direction. Discussing this among ourselves, we talked about leaving the company and rebuilding the code from scratch over a few months. We are not taking any code with us. We are not taking customer lists (we probably will aim at different customers anyway). The code architecture will also be different — hosted vs. stand-alone, different modules and APIs. But at the feature level, we will imitate this product. Can we be sued for IP infringement, theft, or whatever? Are workers allowed to imitate the product they were working on? We know we have to deal with the non-compete clause in our employment contracts, but in our state this clause has been very difficult to enforce. We are more concerned with other IP legal aspects."

The can absolutely sue you, but they'll lose. If they can't take two blocks of code and say "he stole this" they have nothing. I assume you didn't sign a non-compete agreement though cuz then you'd lose.

As mentioned in parent, a non-compete will screw you before you even get off the ground, since your very plan for the software could be construed as very direct competition, even if it doesn't share a single character of code with their product.

Assuming you didn't, retain a lawyer anyway. Anyone can be sued for anything in this day and age. The trick is, with the help of the lawyer, you can make sure any suit wouldn't be able to stick in the first place. Even if there's never any legal action, the lawyer will still prove helpful to you.

I know people who have lost outrageous suits because they failed to show up in court. I'm sure these suits would have been tossed out had they showed up because two of the people (5 where sued) had their lawyers who had it tossed in no time. 2 of the remaining 3 got lawyers and had their judgment overturned on appeals citing something about not being served notice properly and the last one doesn't want to spend the money because he got busted for some felony and will spend most of his life in prison.

In some areas, you have to show more then in others and the lawyers know what the minimum is and sometimes refuse to file (it makes them look bad). But once the case is filed, it doesn't disappear until some action is taken on it. The judge can't or doesn't throw something out without a request. IF no one requests it to be tossed out, then he can rule that there was no standing or whatever.

And in this specific case, it can easily come down to just getting sued into bankrupcy. The people may not lose in court on merit, but only because they ran out of money to pay for a lawyer to represent them in and out of court. And this type of case (in general, as it depends on specifics really), it's unlikely that a lawyer would be willing to go into the case on commission, as you only get money if the judge penalizes the other side or awards costs (and depending on your jurisdiction, 'costs' may not match what you actually pay your lawyer).

The people may not lose in court on merit, but only because they ran out of money to pay for a lawyer to represent them in and out of court.

Perhaps the solution in this case is to retain a lawyer on staff. This is a startup, right? Since they're anticipating fairly extensive legal issues from the get-go, they should hire a lawyer as a full-time employee, which would limit costs to be equal to his salary. They can pay him using venture capital money (just like how everybody else would be getting paid) until they have a sellable product.

Since Slashdot doesn't support Non-Latin characters, translating into Chinese in slashdot is easy!

????????????

See, that wasn't so hard!

And slashdot gets mad when I use a lot of "junk" characters, so I will go on and say that this isn't 1994, pretty much every single OS/Programming language/browsers supports lots of characters(ok, so maybe Windows doesn't, but that hardly qualifies as an OS.) Why doesn't slashdot?

So after 3 times of trying to submit, I will type a little more. The whole firehose view on the mainpage sucks. My guess is that I am going to hit submit a 4th time and the lameness filter will still abort my post. Malda must be pro-choice.

On the 5th attempt, I must pare down my joke.

On the 6th attempt, it hardly becomes a joke anymore because the lameness filter is insane.
On the 7th attempt, I'm about to give up.....
On the 8th attempt I think I will submit a bug report. The post was supposed to be a bunch of ? marks because that is what slashdot translates non-latin characters into(though some have found workarounds)....but the lameness filter destroyed my attempt at criticism of the site...maybe thats its purpose?

In that case the question is: "Why does a forum for geeks not allow anything outside what's covered by ISO Latin-1?"

Is IPA somehow dangerous? Cyrillic? Mathematical symbols? Or the Euro sign? This is a forum for technical people who, due to their geek nature, prefer to use the appropriate notation to communicate things not easily communicated in ASCII. For example, it's extremely difficult to accurately and concisely communicate the pronounciation of something without using IPA. That's what IPA was design

Bidirectional codes are dangerous, as the erocS cases I mentioned above demonstrate. Some other codes look more useful for ASCII art and aren't dangerous as much as lame, such as U+0B08 ORIYA LETTER II from Oriya [unicode.org], which looks more like the head of a Smurf than a letter to English speakers.

Yes it is... However one should assume that in 2008 a tech website would be able to support the technology X-SAMPA crudely reimplements. Also, SAMPA doesn't have nearly the penetration of IPA - while one can expect virtually anyone who has learned a foreign language to have at least encountered IPA, SAMPA is useful only to those who do phonetic discussions in a long-outdated encoding.

As far as I know, there's no legal requirement to have a lawyer -- you can always represent yourself. There's only a right to legal counsel if you're accused of a crime -- and, I assume, some sort of requirement to represent someone else.

Even assuming that's not the case, there are always asshats like Jack Thompson.

Depends on who you think gets to define what languages exist. By whose authority did you conclude that Chinese != Mandarin? Because my (state-run!) college offered Chinese as a language option. That makes it an official language in my book.

The submitter has indicated that he signed a non-compete clause but knows they are difficult to enforce in his state. IANAL but here in Australia non-compete clauses are SOP despite the fact they are considered a restriction of trade under common law and are totally unenforceable. The only people who pay any attention to them are the ignorant and the agents (same thing in many cases). Agents respect non-competes because the employer is their customer and they don't want to piss off potential/actual customers by encouraging contractors/employees to "break their contract".

AFAIK the US also inherited English common law but now has ~50 different forks.

A contract I once signed originally had one... they tried to cover work I did at home as well, and I just said I wasn't going to sign whilst that clause was in. When they refused I merely crossed it out before signing. They didn't bother to read what they were countersigning.. their loss.

This current job doesn't have one - in fact almost everything I write is under dual copyright so I can take the code and use it myself if we part company.

Being a programmer, your skill is programming and it is normal that you work in programming.

If you get laid off, you may work for a competitor, otherwise that would mean your ex-employer is deliberately trying to prevent you from making a living. If the only programming job you were able to find were for a competitor, you could not be expected to turn it down since you need to have a livelihood.

If you didn't get laid off but quit and the employer wants to prevent you from working for a competitor, your ex-e

Keep in mind IANAL, but we had a situation where I work that might be applicable. Our company bought another company (I'll call this other company X) that had a product offering we wanted. The founder of company X was paid a good deal of money and signed a non-compete that was in effect for 1 year.

During this 1 year time period, the founder of X used the money and hired a staff to build a competing platform with a new design and better technology, something he was able to afford while running the business himself.

On exactly the day after the 1 year non-compete ended, he opened his doors for business and started selling. There was nothing we could do about it because he had not competed with us during the time of the non-compete, he simply used that time to build a new platform. It was all new code, so we couldn't get him for that. We did investigate the data he was using but he had acquired it himself, from the same sources we used.

His new company sold to our competitor a couple of years later and he made another bundle. He's now under non-compete again, but has already started work on a third generation for when that one ends.

All this is saying, if you properly document your work to show it is all original, do not attempt to sign up any customers during any time period under which you may be covered by a non-compete -- not even beta customers, and more importantly don't continue working for your current employer, then I would think you would be ok.

The big thing though is to break all ties with your current employer, and you may even want to avoid meeting with folks that still work there. All the lawyers need is one thread connecting you to your current employer to make a case that they can claim your efforts, and since an established company generally has lawyers on staff and you don't, they can out spend you in litigation to the point it won't matter who is right.

I would suggest you and and your friends find an outside attorney to discuss the situation with, and be certain to have details of any statements you signed when you started working at your current employer.

A non-compete generaly has a limit to it. Check the wording on it closely. I have 2 possible solutions you could ask your layer about.

1) Start working on it as a personal project with friends. Do not form a company at first. You could have someone's sister start the company and register the domain. Once the non-compete expires, every one make it official.

2) Hold off on getting any customers or doing any releases until after the non-compete expires. If challenged in court, present the fact that they ca

3) Get the ok from your boss before you leave to join a software start up that your friend started. Mention to him that they dont have any product yet but it is a software company. Ask him if that makes it in conflict with the non-compete that you signed when started.

No, absolutely not. This will invaribly cause your boss to come after you, and it's none of their business what you do after you leave. Under NO circumstances should you ever revel your plans to your soon to be former employer... EVER.

I am Ashamed of you people, this is slashdot and someone here has just given us a Dorothy Dixer.
(Please note this is my interpretation I'm tiny whinny bit biased)
Well you see there was this Operating system called Unix that was written in the 1960's....
AT&T which was a phone company couldn't sell, due to the laws at the time, software so they allowed Unix to used by University's for a small fee.
[this is probably a bit loosely based on truth here]
In the 1980's the laws changed and AT&T could sell software.
Well AT&T said everything to do with Unix is ours and any software that has been added to Unix by the University's is also ours and pays us Mega amounts of cash to use it.
Well some people at University of California Berkeley (UCB) got very annoyed with this and released a version of UNIX without any AT&T code.
This version was called BSD 4.4-lite a court battle then ensued that ran until the mid 1990's.
Novell then purchased Unix from AT&T and some sort deal was done and UCB no longer distributes BSD.
heres a link to the story.
http://oreilly.com/catalog/opensources/book/kirkmck.html [oreilly.com]
so lessons learnt
1) You will get sued
2) If you hang in there you might just win
3) Be prepared to cut a deal
4) [maybe this should have been first] Get a good lawyer !!!
5) You ever here of a guy called Richard Stallman ?
- sort of the same thing happened to him but he started something called the free software foundation.
http://www.fsf.org/ [fsf.org]

"If they can't take two blocks of code and say "he stole this" they have nothing"

WRONG.

REPEAT AFTER ME: NEVER TAKE LEGAL ADVICE FROM SLASHDOT; NEVER TAKE LEGAL ADVICE FROM SLASHDOT

There are four problem areas that you might face:1.) contract law - your non-compete - you will be sued on this as an example to the others2.) trademark law - (or more accurately, trade dress - look it up on wikipedia) - if you copy the look and feel of their product, expect to be sued3.) copyright law - this is the area that the quoted poster is referring to - you might be ok on this one, although if they can prove similarity you might be screwed (because you sure had access to the code)- I'm not too familiar with copyright law with respect to computer code.4.) trade secret law - (again look it up on wikipedia) if they can prove you copied any of their trade secrets with respect to the product you are screwed.5.) patents - are their any patents on the software? Do you know that there is or isn't?

Also remember that even if they sue you and you win, you are still going to be in line to pay an attorney big bucks. So even if you win, you lose. And given the facts, expect to be sued immediately (I would sue you if I was the employer).

GET A LAWYER IF YOU PLAN ON DOING THIS.... you should not screw around with Slashdot on this one.GET A LAWYERGET A LAWYER

Some non-competes are enforceable. My father-in-law worked for a wireless company and when they let him go they paid him 2/3rds of his salary to not work for a year. This was a contract, and since he was being compensated, it was enforceable. I think he was also able to collect unemployment during that time as well because he was being paid for past work, not current or future work.

The moral of the story is that if anyone asks you to sign a non-compete agreement, ask for money. The HR folks will then usually file the NCA in the circular bin. I know the two times I've brought it up, I have been hired without signing it.

This entire discussion sounds so much like the ones on self censorship with regards to the government/other evil entity listening in on our conversations. You change your behaviour on the mere suspicion that something could happend, which is a really bad thing. That way the red-team wins on walk-over.

In this specific case, people fail to pursue the american dream, of creating value for themselves and society on the basis that a company they used to work for might go after them in court.

Even if it were safe, I'd expect there would be a lawsuit no matter what. I'm sure there's a ton of other programmers out there who have similar thoughts. As companies grow older, they seem to become more and more stymied by a PHB than driven intellectually by those who first made it's growth possible. Just make sure your starting group retains some council - and be sure to file as an LLC, also.

Remember, employment contracts usually cover ideas created while at a company as well as implementations. Check yours carefully, but chances are they already own the rights to the idea of what you're going to create, simply because you thought of it while working at the company.

On another note, it sounds like what you're doing is "management doesn't want us to do this properly, so we're going to leave and do it on our own." You're current company turned down one direction it could take, and you want to follow it anyway. Unfortunately, at this point that's their business plan whether they optioned it or not.

"look and feel" copyright claims have also been upheld in many courts, so you might want to avoid doing too close of a copy.

It sounds like you're getting yourself in for a world of hurt. If your "large" software corporation is truly large, they can simply outsurvive you in a lawsuit, whether or not they win. And considering what you're doing, there may very well be a strong enough case that a good lawyer can win. And that's all they would need to shut you down.

Or do something related, that (initially) supports the existing product, making it faster or better? This will allow you to exploit the knowledge you already have and use your current employer as a reference/sales source.

Most start-ups I've ever worked for spawned from another (bloated) company in a symbiotic, but evolved to outstrip them.

(And you and I both know that on your computer somewhere are a load of tools that only you know about which could easily be suborned to your needs.)

...but the hardest and most important part of running a software product company is selling the product. Your new, better designed, better documented, better implemented product has to compete with the same feature set - you said it yourself - with a more established product. What advantages will your product give the customer, making it easier to sell and possibly making the customers switch ?

Zing, that's correct. The real question these guys should be asking themselves: are we really sure that management and the "sales drones" are fundamentally incompetent, and that we are fundamentally better? What makes them think that 10 years down the road their company would be any different? Perhaps selling a product to lots of different customers is just hard and hosted vs standalone is not, ultimately, such a big deal?

Overhyped by sales drones? Well, even if you don't, at least your colleagues believe in your product.

Their paycheck depends on them being "true believers". Can you imagine if they went around to customers and said "We want to sell you this really crappy, sucky product? How sucky is it? It will give you so many headaches you'll think Microsoft wrote it..."

It's very hard to get someone to believe something that goes against their perceived financial interests - which is why management frequently doesn't

Moreover, if you ever manage to build a software company where the product team and the sales team aren't perpetually trying to strangle one another... THAT'S your product right there. Tell the world how to do that. In my experience you'll be the first. =)

are we really sure that management and the "sales drones" are fundamentally incompetent, and that we are fundamentally better?

I would even ask, are these programmers really making the product they think they are? I've seen it happen before that a bunch of developers complain about their sales people, essentially that they were selling it wrong. The salespeople kept focussing on feature set A, while the developers thought feature set B was much more important.

And the problem there was that the customers cared about feature set A, and the salespeople knew it because they were the ones talking to the customers. The developers seemed to be more interested in developing what was fun/interesting to develop, while the customers just wanted certain specific functionality.

In fact having worked in software sales, I'd say that support is probably the determining factor in most sales unless you have a very specialized product. And if that's the case, you're going to need to outstrip your employer's old code by miles since they're the established player in the vertical.

As a developer, you may know that the code sucks. That it just somehow compiles. That it really should be subjected to a rewrite from scratch. That "WTF?!" is present in five more comments than is healthy. And you're probably correct. However, when it comes to actually making money from it, you just need to be better than your competition.

I've fought with coders and with salespeople at the same company, often times over the same issue (it's a hazard of being a sales engineer - you often end up as a moderator). Neither would exist without the other, so stop blaming each other and realize that both of your problems are management's fault:)

Not only am INAL, but I'm in a similar position as the original poster. I'm partly thinking that since I have personal projects that could benefit from the software, I'll keep it to myself until any non-compete expires (even if it's not enforceable) just to stay on the safe side. Which means that development is well underway, for me. It may never make it into the public. It may go out commercially. It may go out as open-source, with some sort of hosting(SAAS)/support-driven business model - right now, the most likely. But until you know that there's no valid case should your ex-employer sue you, I'd keep it as a personal project.

Heh, some of our former employees tried the exact same tactic, and as an added bonus actually managed to convince one of our sizeable customers to go with them, all based on promises of being able to give them a better system with more features using the latest and greatest programming languages that were the rage at the time. (I'll freely admit that the company I work for still uses COBOL on it's older clients business systems)

The both lost - 5 years and many, many millions down the line the customer turned round and said "Right, this isn't working, we want our old legacy system back". In that time these former employees and thier new company were unable to provide a rewrite that was as stable, fast or feature laden as the system they were rewriting it on, so the customer simply came back to us and said "Where do we sign?".

The most amusing part was when the negotiations were taking place, the former employees tried to sell us thier IP and the system they had developed. Our CEO simply laughed at them.

Don't get me wrong - I fully admire what they attempted, but the manner in which they underestimated what it would actually take to rewrite a legacy system (incorporating 23 years of ongoing development) from scratch was a perfect example of "If it ain't broke, don't fix it".

And it has to be said, though most sales guys are useless, the really good ones are gold. There is a guy where I work who has turned wrong numbers into sales. That is seriously hard work, and for all I might bemoan his lack of IT skills, gotta give the guy his props. Sales is a hard job, especially cold calling, and what will make an idea like the GP has work more than anything is who he has selling it.

To re-iterate, management and sales are hard. If you don't have a marketing plan and strategy from day one, and you guys think you can just build a better product than your current employers in six months, expect to fail.

How wealthy are you? Most businesses operate in the red for the first 2-5 years. What that means is that, even after all the revenue, you'll have to loan money to the company, or secure a loan for the company (much easier said than done, you can generally only get business loans for hard assets), to be able to pay the expenses, and those expenses include no money for you or your co-founders. Can you afford to work for -$x for 2 years. If you are under capitalized from the start, you will fail.

How much time do you have? If you think you're signing up for a 9-5, show up, program, and leave, you're in for a rude awakening. Operating a businesses is significantly more time intensive than you think it is, and chances are you won't be able to afford all of the 'worthless' support staff that your current company has. All the jobs they do, you get to do too. Expect to work no less than double time for the first couple of years, and more realistically be prepared to spend all of your time on it. Underestimating, being unwilling, or being unable to commit the necessary time will lead to failure.

How risk adverse are you? 80-90% of businesses fail within the first 5 years. Are you, having made no money after 20 months, going to cut your losses and walk away? What about your co-founders? You have to be prepared to accept the fact that you could potentially lose ever dollar you put into your company. If you're not, don't even consider this.

What advantages will your product give the customer, making it easier to sell and possibly making the customers switch?

I think you make very valid points. However there is an advantage good programmers can have, even over a well-established company: They may be able to complete the project. The waste and the insanity of IT companies does not just exist in Dilbert cartoons, it's real.

That's not to say that it's as easy to manage people as it is to complain about management, or that you can run a company

If you signed any sort of NDA, you might be liable for any information you gained while on the job (for example, architecture, business logic, algorithms.) If you didn't, you still might (theft of intellectual property.) I imagine you'd be quite safe if you could somehow prove that you had never inspected the code in any way. Since I'm guessing at least one of you was a programmer, I imagine you can't prove this. I, personally, would find the whole thing dubious and recommend avoiding it, but if you want to try anyway - get a lawyer.

Most job contracts contain some form of an NDA and a non-compete clause. Both may apply when you start making "better widgets" than your former employer. Review the contract you signed when you got your job, preferably with a lawyer.

Starting a new company is easy, the hard part is getting the revenue to keep it going. A lawsuit will cost you time and money and is a great distraction from doing business. Even if you win the lawsuit, the company may go under due to the legal costs. I would recommend making "

That is exactly right. If any of the guys had access to code/algorithms that the old company considers trade secrets, then they are in a world of pain if they replicate that.

If it comes to a lawsuit, their old employer will most likely subpoena them to provide their new code to an independent expert for code comparison. Again, any hint of copying even small pieces (or recoding algorithms considered trade secrets from memory), and they are done for.

Presumably you're planning on using a different name, logo, and such for your product. It isn't hard to avoid trademark issues. You've already pointed out that you're not taking code, so that rules out copyright issues. If the old company has been patenting aspects of the project, this could be a potential for legal trouble as having worked on the old project might make it easier to claim willful infringement on any of these. It sounds like your plan is to change things up enough that this probably isn't an

First off, don't ask "can I be sued for this?" You can be sued for eating a ham sandwich. The important question is whether you'll face legal action over this, and only secondarily whether you'll prevail. Court process today is so messed up that paying for a lawsuit, in both time and money, is often more ruinous than the final judgment against you.

Being in the legal right does not insulate you from lawsuits. It never has. You should be more concerned with pre-emptively preventing a lawsuit from being filed, not whether you would prevail in court if one were to be filed.

One of the reasons why so many people say "get a lawyer!" is because, believe it or not, lawyers are very good at this sort of thing. Lawyers are excellent business negotiators. Talk to a lawyer, explain what you want to do, explain that you don't want to be sued. The odds are very good the lawyer will be able to get you a way in which you get to do what you want to do without worrying about a lawsuit being filed.

A good lawyer wins lawsuits. A great lawyer prevents lawsuits from being filed in the first place.

First off, don't ask "can I be sued for this?" You can be sued for eating a ham sandwich. The important question is whether you'll face legal action over this, and only secondarily whether you'll prevail. Court process today is so messed up that paying for a lawsuit, in both time and money, is often more ruinous than the final judgment against you.

Maybe I've gotten a bad impression of how the legal system works in the US, but I'd say there's way too many reasons for them to file a lawsuit regardless of whether they win or lose. Consider this, they got an existing product with an existing revenue stream. Their development pace will probably take a massive hit from these resignations. How do they buy time to rebound from that? Well suing you so draw money out of your development fund, making your people spend time documenting that you've done nothing w

* Do you have an NDA or non-compete clause? In that case - follow it.* In general, unless the softawre implements patents, you are free to copy it.* Especially if you can proove that the stuff you DO copy is publicly available. This can include features, UI workflows, even architecture. Proove is easy: demoes, public documentation etc. all proof that you did not use "hidden knowledge". Even thigns that you can deduct (not reverse engineer) from an available demo helps here.

You can get sued for anything. Of course, the lawsuit may not be successful, but your new team will be swamped by the cost of defending yourselves. Why don't you think up another idea entirely and not risk getting into needless conflict with your former employer? To the outside, the fact that you put yourself in direct competition with your former employer, makes you out to be a bunch of bitter engineers. All your employer needs to do is to imply IP theft and start a frivolous lawsuit and potential cust

Watch out. Definitely talk to a lawyer. It will be very hard to prove that your knowledge of your employer's product didn't make it into the new product. It's not particularly difficult to meet copyright requirements, but there are other aspects. Main issues are going to be common law things like unfair competition, as well as trade secrets. People do this kind of thing all the time, and they also frequently get sued for it. You'll have to consider your particular circumstances, but if this seriously

It'd make to much sense to allow improvement and competition of the application of software ideas in the proprietary world.It'd be rather self contradictory of a proprietary software company to not sue.

Did any of you sign no-compete agreements? Clearly you don't have any sort of hope for a clean room development environment.

People sue others all the time and it can be a very resource draining matter to deal with. Consider SCO....

So maybe in the overall picture, either way you go, its not going to be any mor

Write a business plan in which you:- Have 20K available for a lawsuit (number pulled out of air)- Have enough reserve to survive the time while you write said product

Also, consulting a lawyer will cost money but it's a good idea because that investment alone will weed out the talkers. Everyone dreams of starting a company some day. So your friends/teammates of course love to talk about it. But will they be there when plans get serious? Or will their spouse have objections?

I have "re-written" a few programs in my time.
Here is what you need to do:
1) Plan on being sued. You can't avoid it (the big guys use it to keep you from competing).
2) Work around the system. To sue someone, you actually need someone to serve papers to. This the first thing to attack.
Form two S-Corps. One where you transfer all the money (off shore account is a must) and one with all the debts and oh yeah - your public face/address/etc to the world.
3) Use a post office drop box. To be served papers, they have to hand you the documents. Kind of hard to hand them to you if they can't meet you.
4) Having been "served" (which can take them months - talk about some pissed off lawyers). It is time for the next step. Offer them a couple hundred bucks to buzz off (if they have sued you before, they'll take the money - if not, time for a lesson).
5) Don't send anyone to represent the S-Corp in court. Ignore them.
5) They win a default judgement. Yawn. Ignore them.
6) The lawyers involve the county sherrif. He'll serve you notice they are seizing the property (bank accounts, property, etc) held by your debt laden, assetless S-corp (depending on where it is served you have a number of days to vacate etc). Yawn. Great. Give it to them because it is worthless.
7) Form a new S-corp, give load it with debts and your new public face and off you go again.
Rinse and repeat as often as necessary.
Oh yeah, one more thing - don't forget to pay your S-Corp taxes. IRS can come after your personally for back taxes. But, civil lawsuits can't.

That is where the off-shore account comes into play (not that I've ever needed that and bankrupted 5 companies as a result of being sued). Hiding assets and finding them can be a game all by itself. I do the same thing with my personal assets. The world is a big place (I recommend a well-known carribean country myself) and most lawyers don't have the resources to be chasing you all over the place to get at the real money. Worst case - cash out your holdings (bear bonds is a good vehicle), bankrupt the holding corporation, and start over (and put the bear bonds in a safe deposit box). On paper, you can be personally bankrupt, and all your corporations can be bankrupt and work on a cash basis for a while till the vultures lose interest. What the lawyers are trying to do is run you out of business. Give them what they want (or seem to). Time is on your side. Lawyers aren't cheap and the opposition will eventualy run out of cash or give up (or when they seem to win, they won't have the time to sit around and watch what you do afterwards).:)

You have to be careful because unless you really understand how the laws work, you can get into trouble for just following advice even from a lawyer. For example there's something known as "piercing the corporate veil" which gets around setting up fictitious corps for the purpose of insulating another entity. In order to do this, one must prove that the corporation in question does not act as a corporation should (have a board, have a corporate account and books, have records of board meetings, etc).

Also keep in mind that lawyers often operate as partnerships so they too are businesses. Their duty as an agent is to of course act in your best interest but as a business they're hired to "win". So of course they might say that you can do such and such but it all depends on how good of a lawyer they are and how well their experience or advice will hold up against the competition's lawyers.

Sure, you should speak to a lawyer but if you really want to play dirty you'd better take a business law class and understand the rules of the game yourself. To do otherwise is just like walking through a gauntlet blind.

This advice is for the OP. You, the parent, may have had experience with this already and know what you're doing to get away with it.

Disclaimer: I am not a lawyer and this is not legal advice. So, yeah, get a really good lawyer and get some good legal advice before you do anything.

Over the past 10 years, I have served as an expert witness in a number of IP-related software lawsuits, many of which have a fact pattern pretty much identical with what you've laid out.

Yes, they can sue you on (at least) two different grounds: copyright violation and theft of trade secrets.

The case Computer Associates v. Altai [wikipedia.org] established the concept of non-literal copyright infringement of source code. Even if you rewrote the program from scratch in another programming language, the AFC ("abstraction, filtration, comparison") test could be used to find similarities, and your (former) employer could argue copyright infringement, not just on source code grounds, but on architecture, design, database schemata, and data file structure.

Even if you go one step farther and use a "clean room reverse engineering" [wikipedia.org] effort to rewrite the code, you could still be sued (and lose) for theft of trade secrets. Your employer would need to identify those trade secrets, show what steps it took to protect its trade secrets (typically such actions as IP and/or confidentiality agreements, some measures of physical and electronic security, etc.), and argue for the value of those trade secrets. You would have to show that those "trade secrets" can be documented outside of their history at the company you're leaving.

Note that if any one of your group of "good friends" is seen as having a significant position in your large software company, they can also try to come after you for "breach of fiduciary duty".

In any case, they might well name each of you individually as defendants along with whatever new company you set up to develop this software.

In short, there are major risks to what you are describing and not a lot of upside without an explicit release. It can be done, and done successfully, but lawsuits are expensive...bruce..

Before leaving the company, delete all the existing code, smash the servers, shred the backups, bomb the offsite storage, and slaughter any employee or customer who doesn't follow you. That way when you do release your product, there will be no one left to try sue you-- and even if there is, they don't have a product to use as evidence anymore.

(Suggested because this advise is just about as good as anything else you'll get on the thread. Get a lawyer. Seriously, why to people insist on asking Slashdot "How do I do this legally questionable thing without getting caught?". Do you really thing that when you do get sued, you can go to court and use as an excuse "because halcyon1234 told me it was ok"?)

First of all, posting a question like this on a public forum such as Slashdot isn't going to get you any answers you can have confidence in. In fact, the posting itself, though made on a "no name" basis, does provide a few clues, is traceable to whoever posted it initially, and could come back to haunt you, as evidence of your timing and intent, if nothing else. Are you sure no one could ever link this up to you? Are you sending emails like this to each other as well? Pretty dumb, if you are. Find a lawyer and get some competent (and confidential) advice before you make indelible records of your deliberations and footprints.

My company was acquired by a much larger company, and "they" chose to consolidate our platforms onto a product offering that I (and my coworkers) feel is a much lesser product. We offer a hosted ASP solution with accompanying business consulting. From a tech standpoint (myself being the primary developer on our software), the platform we are moving to is horrible, crappily written, aging, and falling apart on itself.

I have had the same thoughts about wanting to do it myself, rewriting from scratch, but there would be obvious similarities in part because I wrote much of our own code, and because there are only certain ways you can do things in our business. On top of all that, we had to sign non-compete employee agreements when we "hired" onto the company that bought us. I wasn't (am not still) in a position to quit my job, and at that time I didn't know what garbage this company was about. Unfortunately, it seems I'm also in a state that *does* enforce non-competes.

My thought now, is to write competing software, and open source it as a project on sourceforge. The way I read it, the noncompete keeps me from working for a competitor or starting my own competing business, or somehow profiting from competition, for a period of one year. But if I write software that does what we do, better, and allow someone else to use it and base a business on it, that would at least be something. Plus, maybe some other opportunity will come along, I'll go there for a year, and then could really focus on creating a competing startup after that. The sad thing is, this company has bought the top 3 competitors in our business niche within a year. This foolish "integration" for has effectively stymied any progress for our market for at least 2 years, without any signs form management that they want to actually create any new or innovative ideas. And we're consolidating on technology from 1996 - for a web-based ASP business!!

Honestly, I have no interest in the business - I enjoy the people I work with, and had pride in providing what I thought was a great product. Now I am embarrassed to be associated with the product offerings we have. I don't know if spite alone is motivation enough to create and maintain a new software project. But I think publishing an open source php/mysql platform solution that basically does what our software does is the only way.

Contemplate four things:(1) The "Law." Does it favor you?(2) The "Facts" Will you be able to prove that the law is what you think it is?(3) The "Legal War Chest" Can you afford to prove "the facts?"(4) The "House Lawyer" Can you afford a house lawyer?

If you act on your contemplations, you DEFINITELY need a lawyer. You must assume that your former employer will go after you (if you have a dime) and you must prepare for that. You'll need to be extra-careful about documenting code-origins. Every act that your company takes probably ought to be vetted. You may want to 'chinese-wall' some code development from others. Lots to think about.

You are entering the realm of the blood-sucking lawyers, as the man from Jurassic Park said.

A friend of mine did this about 10 years ago. The original company accused them of theft of sourcecode (which they hadn't done) and made criminal charges as well as suing them. Fortunately one of the new company's founders was a Lay Magistrate. He got the court fatstracked to court and swore under oath that they did not have any source code, which was enough for another judge to throw the case out!

They also brought a civil case for stealing intellectual property, but most of what they included was standard (It was Travel Agent's software), so they put together a brochure of various other solutions and shown that there was nothing that their "old" company had uniquely developed.

The old company then made a big mistake. They wrote to all their clients telling them not to deal with the company my friend and colleagues had set up because their software was "no good" and "ripped off", and that they would not support anyone who even looked at the software. They had 50 enquiries that week, and went from having three large customers (which covered costs and paid a quarter of a years salaries) to 20 in six months (which meant that they were pretty well off)!

First, there's no way to avoid legal entanglements if you take ANYTHING from your employer that they have paid you to produce. The only clean, legal route you have to code happiness is through your employer.

Second, actually selling a successful product requires at least three legs on the stool: development, sales, and corporate support (finance, IT, HR, and executive). OK, you've got one leg -- who's going to provide the rest?

I perceive (and am gratified) by the "rightness" in what you are saying. These people really do propose to screw their former employer. If this were a world with reciprocal conventions of honor, I would agree with you entirely and call them treacherous scumbags.

Once upon a time, Mitch Kapor was working for Visicalc -- he couldn't get management interested in his ideas for integrating graphics with the spreadsheet, and so he gave up an left to found Lotus 1-2-3, which became one of the great sucesses in th